Saturday, June 25, 2022

Revolution Rail buying North Creek-Tahawus 30-mile railway

By Mark Frost, Chronicle Editor

Revolution Rail, which pioneered a railbike business launched in North Creek that it has since taken national, is buying the North Creek to Tahawus rail line.

The price is $2.7-million.

Revolution Rail finished second at a bankruptcy auction in March when it tried to buy the 30-mile rail line for recreational and freight use, but the high bidder — Doc N Duchess Rails LLC — failed to make the required down payment.

Revolution Rail stepped up.

“We have an approved purchase agreement,” Edward LaScala, Revolution Rail’s Director of Operations, told The Chronicle on Thursday, June 2.

Willliam Brandt, who has overseen the sale, confirmed the Bankruptcy Court okayed the deal. “I think it’s a great outcome. It’s a win win” that he said is sensitive both to forest protection and maintenance of the railroad for freight use creating industry job opportunities.

Mr. LaScala said, “We believe in the environment and we believe in the economy. We’re committed to both those things at once — that’s what’s been missing.”

Revolution Rail photo.

What remains is for New York State and the U.S. Department of Transportation’s Surface Transportation Board to sign off, which is anticipated imminently.

“We hope it’s a this-month event,” said Mr. LaScala. “We got a lot of people pushing. There are a lot of people that are eager for us to take control of the track” — citing “green groups” like the Adirondack Mountain Club, Adirondack Council and Open Space Institute.

“They know we’re the best stewards of the line.”

Mr. Brandt said he expects the sale to close in the “next 30 to 45 days.”

Mr. LaScala said of New York State, “we have an agreement with them. They’re taking it through channels.

New York had petitioned the Surface Transportation Board to abandon the track, but the federal agency favors keeping railways in operation.

Mr. Brandt said the action “for abandonment is probably moot at this point.”

The State wants to guarantee no empty tankers will be stored on the track, “which of course we’re not going to do,” Mr. LaScala said. “We are Adirondackers and love the Park and the beauty of the Park and we’re never going to do anything to jeopardize that.”

Cars were stored on the track under prior ownership.

Mr. LaScala said he expects New York “will pull their request for a stay” and then the Surface Transportation Board will approve the sale to Revolution Rail.

SMS in Fort Edward handles freight

Mr. LaScala said they have the financing “completely lined up.”

Mr. Brandt said Revolution Rail paid a $500,000 deposit and added, “This is going to close very easily.”

Besides recreational use, Mr. LaScala said, “We are geared to work with anybody that wants to move freight….When Barton Mines [in North River] or Paul Mitchell [Stone, in Tahawus] wants to ship freight, SMS can move it for us to the Saratoga interchange.”

SMS Rail Lines — operator of short lines in the Northeast — has had a facility at Fort Edward since 2017. Its website says of the Fort Edward operation, “We serve industry in the region providing ‘on-demand’ rail car switching with array of logistical loading and unloading services as well as rail car storage. We interchange with Canadian Pacific Railway.”

Mr. LaScala said, “We have a very close working relationship with SMS Rail…We’re running rail bikes on their line in southwest New Jersey — the Woodstown Central Line — gorgeous scenic rail” that is Revolution Rail’s latest launch.

Their rail bike business also operates in Cape May, New Jersey and South Fork, Colorado. Mr. LaScala they’re soon to launch in Kennebunkport, Maine.

Locally Revolution Rail operates four railbike lines — North Creek north, North Creek south, Thurman and Hadley.

Doc N Duchess touted titanium

Three bidders vied for the rail line at the March 3 bankruptcy auction.

Doc N Duchess Rails LLC — formed by Carol McClean-Wright and her husband John Wright, of New Mexico — submitted the winning bid, $3.33-million, but “they were not able to come up with the money,” said Mr. Brandt.

He said that when the bidding exceeded $3-million, he had told bidders that the unexpectedly high offers would require posting of an additional deposit that he said Doc & Duchess failed to provide.

Revolution Rail had submitted the second highest bid, $3.32-million.

After the default, Mr. Brandt said Revolution Rail asked for its purchase price to be lowered because it said Doc and Duchess’s defunct bid had inflated the price.

Mr. Brandt said that all parties agreed to Revolution Rail’s $2.7-million offer, “including the third bidder,” Sierra Rail of California, which departed the bidding much earlier.

When Doc N Duchess’s high bid was initially accepted, its co-owner Carol McClean-Wright was quoted in the Albany Times-Union describing stone in Tahawus as “an excellent source of titanium. That’s our main goal.”

SNC: Saratoga North Creek Railroad. Revolution Rail is buying the portion from North Creek to Tahawus in the central Adirondacks. Warren County owns the line from North Creek south to Corinth, where ownership shifts to the Town of Corinth.

The Adirondack Explorer reported then Ms. McClean-Wright “said she and her husband are determined to move forward because they view the work of obtaining a source of rare-earth metals — believed to be abundant in tailings from the old mine at Tahawus — as vital for national security.” She reportedly said their financial backers in Europe couldn’t move the money quickly enough during the Covid pandemic to meet the May 6 deadline.

In 2016, in another bankruptcy auction, Ms. McClean-Wright bought the former 1000 Acres dude ranch in Stony Creek for $1.405-million planning to “turn the resort into an instructional camp that focuses science, math, engineering and technology,” said the Albany Business Review. The property was sold three years later.

Revolution Rail’s origin

Revolution Rail says it was founded in 2016 by Robert Harte and Michael Dupee, who “combined their backgrounds in education and corporate sustainability, and passion for nature…

[T]ogether, they designed and built the company (and the bikes!) from scratch, partnered with a supportive local community in North Creek, NY, and launched Revolution Rail Company in July 2017 with six railbikes…

“Edward LaScala, offering his background in business and finance, joined Robert and Michael in 2020, rounding out the leadership team….

“Today, Revolution Rail Company runs a fleet of railbikes in five different locations (and growing!) and has taken over 100,000 happy railbikers from all over the world out on the rails to experience nature in a brand new way!”

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